Moody's lowers Magyar Telecom

Moody's Investors Service said it downgraded the corporate family and probability of default ratings of Magyar Telecom BV to Caa3 from Caa1.

Moody's also downgraded the rating on the senior secured notes due 2016 to Caa3 from Caa1.

The outlook remains negative.

Moody's said the downgrade mainly reflects its expectation that the newly announced infrastructure tax, to be introduced from January 2013, will negatively impact Invitel's already weak liquidity profile.

Absent any shareholder support - of which there has been no indication to date - Moody's said it expects the company to face a liquidity shortfall during 2013.

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